Most of us thought the crisis in Europe had to do with holding the euro together. It is not so simple after last week’s tumult—in Greece, in Portugal, in Spain, even in Germany. What is at issue now is not…

LONDON—As recently as last Friday Spanish officials, including Finance Minister Luis de Guindos, were offering investors and the markets sanguine reassurance that, no, there would be no need for a European rescue plan for Spain’s ailing banks. Spain could handle…